OCEANSIDE — The Tri-City Healthcare District board of directors recently took action to set aside the search for a chief executive officer and to appoint Larry Anderson as Tri-City’s permanent chief executive officer. Anderson had been serving as interim CEO since January.
The board’s decision removes the interim status and extends Anderson’s contract, which had been set to run through October, for an 18-month period.
During the open session portion of the meeting, the board took action to approve the final terms for refinancing the Auction Rate Securities. These bonds provided funds for hospital improvements, but had become very expensive over the last year, due to fluctuating interest rates. CEO Larry Anderson and Chief Financial Officer Reid Hollyfield have been working with new lenders to restructure the debt and recently presented a package of refinancing options to the board of directors. The deal features a significant reduction in the amount of interest compared to our current rates.
The board unanimously approved a recommendation to pay off the current $58 million of high-interest bonds by borrowing $45 million from New York based Herald National Bank, entering a $5 million capital lease agreement with Celtic Leasing, tapping $7 million in bond reserve funds currently held by US Bank, and using $2 million in TCMC board designated funds (working capital) to complete the deal. The new financing arrangement will lower monthly interest costs by over $400,000 or more than $5 million annually.
As he began his presentation to the board, CEO Anderson said, “When I started here in January, I believed this refinancing would be taken care of in short order. I was wrong. It has turned out to be extremely complicated, due to the unstable condition of the global economy. I am pleased, however, to finally be able to present a deal that I believe meets the hospital’s needs. This will give us more freedom and gets us out from under the extremely high interest rates that have been crippling us.”